The Anthem-Cigna antitrust trial kicked off Monday with lawyers sparring over the merits of the deal and the effect of the strained relationship between the two health insurers.
In July, the Justice Department sued to block the deal as well as Aetna’s pending acquisition of Humana, arguing both would harm competition in key health insurance markets. The Anthem-Cigna trial will be heard by Judge Amy Berman Jackson in two parts, with the first examining the deal’s effect on national markets.
In opening arguments, DOJ lawyer Jon Jacobs noted that signs of tension between Anthem and Cigna showed the companies would have even more difficulty integrating if their deal were allowed to close, according to the Wall Street Journal. Among other points of contention, the two insurers have disagreed over when the deal will close and are said to have accused one another of breaching the merger agreement.
But while Anthem and Cigna have experienced “strained relations at the level of top management,” that won’t hinder the companies’ ability to integrate successfully, argued Anthem lawyer Christopher Curran. He also said Anthem’s increased scale upon acquiring Cigna would help the company offer lower rates.
When Anthem CEO Joseph Swedish took the stand, DOJ lawyer Scott Fitzgerald questioned him on the government’s contention that Cigna collaborates with doctors while Anthem uses a “drop the hammer” approach to win lower reimbursement rates, according to Bloomberg.
Swedish fired back that “we don’t live in a discount world anymore,” though the judge pointed out that reducing healthcare costs was a key component of the insurers’ defense case.
For his part, Jacobs further attacked Anthem’s argument that the deal will result in savings that it will pass on to large national employers, saying that they don’t count if they are only obtained through more market power, according to Bloomberg.
Also at issue was the two sides’ disagreement about how to define the commercial market, with Curran arguing that Anthem isn’t a national carrier because it has to use rental agreements with other Blue Cross Blue Shield carriers to reach many states, according to the WSJ. Fitzgerald, though, pointed to evidence that Anthem has a close relationship with other Blues carriers, saying Anthem might not be likely to use the Cigna brand to compete against those insurers.